Cover the cashews with boiling water and let them soak for 20 minutes to soften.
Drain and rinse the cashews well before adding to a blender with fresh water, nutritional yeast, salt, smoked paprika, tomato paste, lemon juice and the chile juice from both cans (set the diced green chiles aside for now).
Blend on high until smooth, about 1 minute. Add more water as needed, taste, and adjust the salt. Once completely smooth, pour into a serving bowl and stir in the diced green chiles.
Serve immediately or keep in an airtight container in the refrigerator until ready to use.